116 – Jay Papasan from the One Thing

YouTube Link: https://youtu.be/4K4VFnGpfJo? sub_confirmation 1

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Jay Papasan is a bestselling author, vice president and executive editor at Keller Williams Realty International, and co-owner, alongside his wife Wendy, of the Papasan Properties Group in Austin, Texas. His most recent work with Gary Keller on The ONE Thing has garnered more than 200 appearances on national bestseller lists including #1 on the Wall Street Journal bestseller list. Before joining Keller Williams Realty, Jay served as an editor at HarperCollins Publishers, where he worked on such bestselling books as Body-for-Life by Bill Phillips and Go for the Goal by Mia Hamm.

Jay serves as Gary Keller’s co-author and executive editor on best-selling titles including: The Millionaire Real Estate Agent, The Millionaire Real Estate Investor, SHIFT: How Top Real Estate Agents Tackle Tough Times, FLIP: How to Find, Fix, and Sell Houses for Profit,HOLD: How to Find, Buy, and Rent Houses for Wealth, and The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results. He also co-authored SHIFT Commercial.

Best investing books Simplepassivecashflow.com/books

The domino theory – momentum

18-25% total return for SFH

Start small – and go small first fast

Co pairing tasks

Focusing question – what is the one thing I can do that will make everything else go away

411 – annual goals

Work a maze backwards – begin with the end in mind

Counter balance not balanced

When do you stop pushing and start living?

Don’t buy your primary residence

Involving your spouse

Short segments:

 

 

Podcast #115 – Flipping to passive rentals with Mark Ferguson

YouTube Link

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Aside from blog, owns 15 rental properties in Northern Colorado generating $7K/mo passive income.

Harder to cash flow around Denver. Looking out-of-state.

Since Sept 2015, has not purchased new SFH. Focusing on commercial, flipping, which was best use of time.

Always demand for low-end flips (less risk v. high-end).

Write own goals, don’t rely on other people, and think differently to develop himself.

Don’t C.E.F. – especially if you’re not a contractor.

Some opportunities in purchasing primary residential properties, but not going to stay there forever.

If you want to be creator and sell houses full-time, get a real estate license. If part-time, not really recommeneded unless you own a couple properties already and can expend time.

Goals for more passive income ($100k/mo) and freedom = happy.

Change your mindset and try. Otherwise, you’re stuck where you are (ex: frugal). What’s your motivation and dreams?

Let people drink their haterade.

Tough to let go, but happier to save time by hiring out on blog, website, e-mail, property management, etc.

Not a tech-savvy guy, but build blog and all that SEO!

Wished more good people to hire directly instead of 3rd parties.

Don’t force yourself to buy something – especially in a sellers market.

Are you taking action that’s getting closer to your goals or treading water? Take time for yourself.

Always lot of stuff to do, but don’t stress about it. A couple mistakes or not getting things done will not ruin you.

First blog comment was fulfilling. Drives motivation on how to help give back to others.

Check out www.investfourmore.com and podcast. 453 articles and 117 podcasts.

Contact info: Mark@investfourmore.com

 

Podcast #114 – Jennifer Beadles – Turning Active income into passive income in a Primary market

YouTube Link: https://youtu.be/KrOhA6xv6rc? sub_confirmation 1

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Income has a cap
Bought first house at 21
Take business profits into buy and hold rentals
Say out of Seattle
Mount Vernon WA
Tell the agent in super simple terms
Comments on meetups
Should i get started now?

Podcast #113 – Buck Joffrey – Medical Surgeon gets fired and goes into freefall

For the limited offer coaching from Buck and program: Simplepassivecashflow.com/buck

Video Version: https://youtu.be/jq0MhXDEzzA

Audio Version: https://youtu.be/TUmVLqNNtlE

 



Text “simple” to 314-665-1767 to download the Hui Google Drive files and the  2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

 

We heard you on podcast 17 and you told your story – http://simplepassivecashflow.com/podcast-17-serial-entrepreneur-dr-buck-joffery-wealthformula-podcast/

Hearing your story high paid doctor. Describe yourself as an employee?

Great butt kisser

Lane’s getting fired story

So you were fired what gave you the security to not go back?

Lane’s getting fired story

 

http://richhabits.net/catastrophes-reveal-inner-greatness/?mc_cid=610082b2da&mc_eid=a129173ca3

 

Why professionals are trained to go through the system

 

The two excuses why not to leave the professional system

 

Wealth formula – Mass (money) x Velocity (Leverage) = wealth

 

You need to make money

 

What happen to assisted living project?

 

Taking shots and trying things out? Where is the transition point from taking singles to going to homers?

 

We are talking about Jorge from Simplepassivecashflow.com/ahp

 

SPC listeners are usual creatures. Get me in a room with a bunch of W2 workers talking about their frequent flier miles and their cars and I’m completely turned off. What are your thoughts on coping with this?

 

What are some ways you teach the entrepreneurial spirit with your kids?

 

What if they just want to work for the man or do peace corps?

 

Simplepassivecashflow.com/buck to get the free 1-hour coaching offer from Buck.

—————————————————–

 

Our worst W2 moments which were our Han Solo Moments

 

How to make it as a medical professional? – Kiss Butt 😁

 

We are robots.

 

For more content go to Simplepassivecashflow.com/buck

Podcast #112 – #LaneHack – Fear + How much risk to take + KProxy!

YouTube Link: https://youtu.be/8K4AY4oOAUs? sub_confirmation 1

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

The two biggest enemy of success is fear.

It inhibits you from taking action. And nothing happens without that.

Fear, never goes away, no matter how successful you become. Same thing is said about CrossFit workouts… they never get easier. You just plateau to a new level of suck.

The same fear exists for the successful, why don’t they hold them back from taking action?

It made me push to busy my first out of state rental in Birmingham from Seattle, sell my Seattle rentals to 1031 into a dozen out of state properties, and lately moving toward a portfolio of syndicated private placements. I don’t know what’s next?

Successful people simply make a habit of taking action, despite the fear. They have gained the habit/muscle or mental six pack of taking action.

By taking action do you gain the experiences of facing obstacles and overcoming them, facing mistakes and learning from them, taking risks and surviving failure. Gained muscle or even a crazy mental eight pack. You draw upon these experience in times of hardship or difficulty.

Obstacles always change but your ability and track record to move around it is what is most important. When we evaluate people to work with Track-record is always important. Obvious we want to work with someone who is proven but realistically every situation in the future will be different and we are really looking for someone who can deliver despite the obstacles. We are not looking for who is a genius (although it helps) or even with some competitive advantage but mostly good character and ability to overcome obstacles… dare I say turn obstacles to opportunities.

There are a couple leads that have had touch times in their deals lately due to circumstances outside their control. What I know of their mindset is that they are freaking resilient that they will overcome the obstacles.

When crap happens we want say:

“we’ve faced a similar uncertainty before and this was the mistake we made and need to avoid”

“we’ve taken a similar risk before and we survived”

Do not mistaken brazen courage with competence/confidence. There are a lot of people who fake it till they make it.

Risk: If you are in aware of the risks and rewards (mentor/stage 3 of 4 of learning) then take the most risk as possible. The Shape ratio theory that I believe in that the more risk you take the more reward you get exponentially. Therefore take as much risk as you can to capitalize on the most reward. BUT… huge caveat here… only take the most risk that you are willing to take that if the worse that can happen you can live with.

This is why I don’t skydive.

This is why I stick primarily to non-recourse deals where the apartment is stabilized.

proxy service: http://kproxy.com/

QRP – Qualified Retirement Plans & Free Book

If you have a 401K or Roth or IRA you need to start using a QRPs or qualified retirement plan!

If you are running low on cash because you have been picking up deals left or just broke because you have been listening to mainstream dogma and you have money in your retirement plans this is for you!

Damion Lupo was a previous guest on episode #40

Here is the webinar! Enjoy and send me questions to post the answer below.

If you are late to the game of investing in alternative investments like real estate (imagine that) and already have a large 401K over $100,000 then you should convert it to a Solo401K or Solo401k Roth version. At that point you can slowly take money out to minimize your taxes (not go into the highest tax bracket) and invest in the meantime as you “leak” the money out of the Governments control.

***Updated 9/2018***

My order of contributing to these (future money) accounts after you take of (today money) regular liquidity. [I suggest per hour Coaching]:

1st QRP – contribute at least until the match.. 100% return

2nd IRA – Flexibility to self-direct

3rd SERP – liability of the employer.. pays out when you leave or after retirement age or a designated age in the future

There are a couple caveats to point out:

  1. When you have money in these accounts it sounds good that you are not taxed on gains but you are restricted from getting a Fannie Mae loan. Using the QRP loans get you the second tier financing options, for example, a Roth IRA can buy real estate on leverage, however, will need a non-recourse loan which is often a fraction high-interest rate and lower LTV. No Bueno!
  2. QRPs like your 401Ks or IRA accounts is pretty much locked up until you are “old”. There are some provisions to get the money out when you are 45 years old but you need to eat today. So I recommend a holistic strategy of blending your investment funding from both QRPs and you regular liquidity. We can likely discuss this in a quick 1-hour coaching call.

Info on using retirement funds for syndication deals:

Question: I am considering investing in a 506c investment on a multifamily property. They are raising a 1 million from investors, then getting a loan and making improvements to the property and repositioning it over 5-7 years. I wanted to use my funds from my SEP IRA which is currently in a qualified intermediary trust. What is the UBIT tax? Will I be subject to that on this deal? Also, should I set up an LLC that then loans the money to their LLC? How can I structure this for tax and liability benefits?

Answer [Note: From CPA and not this is NOT legal or professional advice]: When you invest in a business (syndicate = business) with your IRA, the IRA will be subject to UBIT (unrelated business income tax) and UDFI (unrelated debt-financed income).

For our purposes, UDFI is produced when an IRA uses debt to purchase real estate. Essentially, the portion of the property’s income considered UDFI is based on the percentage of rental income derived from debt.

For example, Property A is purchased for $100,000. You put down 25% of the purchase price as a down payment and finance the remaining 75% with a traditional mortgage from the bank. The property produces $10,000 in net income for the year. $7,500 (75%) of the net income is considered UDFI and is subject to UBIT.

There is a deduction for the first $1,000 of income subject to UBIT. Income subject to UBIT over $1,000 is taxed at trust rates. For 2017, trust tax rates start at 15% and max out at 39.6% after just $12,400 of income subject to UBIT.

UBIT is paid by the IRA account. If for whatever reason UBIT is paid directly by the taxpayer, the amount paid is considered a contribution to the IRA.

Follow up question: Is there any difference in how the UDFI will apply for these:
1) SD IRA
2) SEP-IRA
3) Solo 401K
4) SD IRA (operated as an LLC) so this one is confusing… My LLC owns an LLC (syndication) which owns a property such as 150-unit on 123 main street

Question: I’m trying to decide if one is better than another for tax purposes?

Answer: The solo 401(k) is not subject to UDFI but it subject to UBIT. The IRAs are all subject to UBIT and UDFI. Note that generally the passive income flowing back to you is very low and the, as a result, we don’t see a huge UBIT tax.

Another idea would be to take a debt position (lending) rather than equity. The interest you would receive is free of UBIT and UDFI tax.

(This suggestion of a “debt” position or note investment with the SEP IRA to avoid UBIT and UDFI tax is a creative one… but it’s a very low chance of happening because it’s just too complicated and honestly not worth the effort from the syndicators’ side. It’s a very similar case of to a Tenant-In-Common (TIC) arrangement where an investor has 1031 exchange funds and wants to parlay that money into a syndication. It’s possible but from the syndicator’s perspective a lot of unneeded work when you can just raise the funds the traditional way. Caveat: if you are bringing in a huge amount of money say 50% of the raise then that might tip the scales in your favor)

Ask you can tell this is a really grey area. One CPA mentioned, the answer depends on how you structured the syndication, UBIT may or may not apply for the real estate holding for solo 401k. I would really try to toss the Operation Agreement to your individual CPAs to examine and determine ahead of time as I am not a CPA 😉

Caveat: If you are late to the game and already have a fat 401k then you should convert it to a solo401k. At that point, you should think about putting it into a syndication since you are restricted on how you can leverage it.

So if you are going to have one of these QRP accounts since you have an old 401K or old retirement accounts want to self-direct it in good investments and don’t want to take a huge tax hit right away set up a Solo401k or Checkbook control.

Action Items:

  1. Get a quick pay per hour coaching call to see how this plays into deals coming up in the Hui Deal Pipe Club.
  2. Get set up here or ask me for a warm email intro.
  3. And get the free book on QRPs!

 

Here are the podcast notes:

To get to know Damion more go to SimplePassiveCashflow.com/damion

I have been having a lot of calls with listeners having exhausted their liquidity and have money in their 401K or IRA’s still in Wall Street Investments.

One of those ways to get the money out is via a QRP or Solo401K.

Today’s guest Damion Lupo with discussing – SimplePassiveCashflow.com/qrp to get a free copy of his book

I cashed out my 401k because I figured I was going to pay the taxes anyway and my tax load would be a lot higher in the future and I wanted access to my money before retirement age.

Visit CrowdfundAloha.com – a website dedicated to helping hard-working middle-class people build real estate portfolios.

$26 trillion in retirement plans. You have all sorts of money that can be tapped into, but fear holds you back.

As an investor, Damion has purchased 150 houses in 7 states ($20 million portfolios).

2008: went from $20 million to -$5 million. Had to start all over.

Beyond money, find out your why. Read Simon Sinek “Find Your Why.”

Mission Statement: Free 1 million people from financial bondage.

I.R.S takes 70% of the average person’s money.

The QRP (Qualified Retirement Plan): “The Ferrari of 401(k)’s.”

You probably haven’t heard of QRP as Wall Street tends to control your stuff.

QRP allows you invest in many real estate options (syndications, lands, rentals, apartments, commercial, international deals, HML, etc.).

Total control, fixed fees, endless choices, and FAST with QRP v. Self-Directed IRA. 10X contributions and control with no custodian.

SDIRA will lose 1/3 of profit as UDFI triggered. QRP – Roth has no UDFI – keep 100% profit.

Can keep 401(k) at W-2 and sign up for QRP. Max contribution would be $55,000 in combined plans – $28,000 in the QRP.

QRP can hold other non-real estate investments, such as gold, silver, Cryptocurrency, etc.

Build-in credit line in a QRP. Up to $50K in cash.

Investors, self-employed, and family members are all qualified.

Properties you have or use right now cannot be placed moved in a QRP.

To fund, can rollover any IRA, 401(k), +TSP, 403b, 457.

66% people are worried about not having enough money for retirement.

Free copy of QRP book at www.simplepassivecashflow.com/QRP

Podcast #111 – Interview – Brent Kawakami – Saying NO to a measly $300 a month & Networking on Facebook

YouTube Link: https://youtu.be/dgdMLNq73TM

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

1) How much CF are you making today and how are you doing it?
Generally I’ve fluctuate based on buying/selling of real estate. Right now it’s all from passive investments in apartments. My peak was couple thousand a month.
So as I started investigating other investment activities I dabbled in:
P2P investing – Returns were decent (I think I made like 18%), extremely passive once you funded loans. I was fortunate that none of the ones i lended on defaulted so that’s real risk. While you are earning interest payments, it goes back to account so extremely illiquid. You wait out the loan term which can be long. No control. I’d rather do private lending that’s backed by a physical asset.
Dividend stocks – Lot of research, reading investment newsletters, etc. You’re still at the whimsy of the stock market. I could see doing this in future maybe if there’s a crash and you can pick up trophy companies cheap. Again no control.
Gold/silver – I got caught up by the Gold bug rhetoric of “the dollar not backed by anything” “ the crash is coming” “ look how much debt we have” blah blah . A lot of similar stuff you see some Cryptocurrencies saying now. To me you need treat as a store of value and something you don’t care about price. And you need to hold physically. It’s a chaos hedge. But it doesn’t cash flow. And if shit really did hit the fan, you’re not going to need gold, you’re going to need guns, lol.
Internet business (I did sell it later for a small gain). A lot of work…it’s a business. You can get caught up in the 4-hour work week thing, sell your ebook, etc but this takes consistent cultivating like any other business. I had an instance where a change in Google algorithm killed my profit.
Infinite banking (which i’m all in on still) – You’ve had podcasts before on this topic about all the benefits but it’s an amazing vehicle that complements real estate. Personally I don’t think of this as a true investment, it is a savings vehicle. I treat it as my cash war chest and foundation. Downsides to me are that you have to understand and treat as a system otherwise you’ll fail miserably. It’s also literally a lifetime commitment.
Ultimately I settled on real estate starting the single family route in Dallas area (buy, rehab, rent, self manage, etc). I eventually saw the light (What was the light) of multifamily and started investing passively, sold off my single family houses and now a new aspiring sponsor/operator. There’s all the typical things people say (econmies of scale, non-recourse, etc) but my a-ha moment (my 2nd Han Solo moment I guess you could say) was when I started looking for another rental house. I realized adding another $300/mo cashflow wasn’t going to drastically change my life. If I wanted to level up faster, I needed scale faster. Multifamily can do that. When you get a large check for hundreds of thousands from a disposition event on an apartment complex, that’s life changing and can get you places.

(So now you are in the stage where you are doing all the hard work before the success… lets go through this list of things that you are doing… this add value to the listener and maybe we can have a discussion about best practices – Just think in the future when a future investor listens to all the shit you did to get into this)

1) Joined mentorship program (I would rather not say who they were) No problem. Main best practice to me is it’s almost a requirement for MFH. This is a must in addition to all the other education (reading, podcasts, etc)
2) Regularly Contacting brokers/Signing up for lists
3) Evaluating deals
4) Scheduling in-person meetings with with brokers to connect (what did you do). My partner and I specifically reach out to have a meetings at a broker’s office. We’d talk about what we’re doing, looking for, etc and it gave us an opportunity to meet other associates. I’ve tried to do in-person at their office or if I can take them to coffee. For out of town brokers we’d do over phone or if we travel to see a deal (leveraging a current listing of theirs as a talking point to get convo started).
5) Making regular LoopNet rounds
6) Going on property tours
7) Networking on BiggerPockets/LinkedIn/Facebook, etc
8) Going to Meetups, events, and conferences
9) Partnered up with another new sponsor/operator to duplicate efforts, fill gaps, etc (What do you do well and what does he compliment).
My partner is better at making connections and relationships than I am. I’m more analytical and investigative. He’s an eternal optimist, while i’m Mr. Engineer worst case scenario. He can get shiny object syndrome whereas I’m much better at keepings things on task. We’re both at the same level/point in our investing so we have a good synergy with the perspective we’re coming from. One of the things we like is if it takes looking at 100 deals to get 1, maybe us both looking cuts that in half lol.

2) What is your Han Solo moment…

I had two.

1- One was a couple years into my career and i started think there was more than this for 30-40 yrs and began exploring other stuff (as mentioned before)

2- Shift from single family to multifamily. My a-ha moment mentioned before.

3) Worst life/business moment what did you do a er? Lesson learned?

I’ve had those crappy issues that come up with rentals, like plumbing issues, tenant issues, foundation issues, etc which sucked. Although one big one was not listening to my wife about a single family house. I had a tenant turnover in one of my rentals and I had been mulling about selling and focusing on multifamily. Instead of listening to my wife who encouraged that, I did the easy thing which was find a new tenant. I had gotten so in the routine and it was the easy option even though I knew I was ready to step into next thing. It ended up being my worst tenant ever (she paid but was really needy) and a headache. I ultimately sold it a few months later.

Lesson learned: Listen to your wife more. While she isn’t involved directly in the nuts and bolts, she is a better judge of character and intangibles in both myself and others.

4) Current 2‐week experiment and 6‐month project? (90‐180 day goal) A mark of a high performer is to put your ego aside and accept the help of others and mastermind maybe folks can help you by you asking.

2-week: Let’s see when we get there. Lot of personal type things likely going on (not sure if that’s valuable for your audience?)

6-month: Sponsor a 75+ unit, class b/c apartment. That’s my one thing.

5) What is your simple passive Cashflow number? Now imagine you had 2x that amount… Describe your ideal day, detailed rou ne, and what projects you are working on.

6) Something that you have recently or thought about “burning your cash” on for me savings or an improvement in quality of life.

Meal service, not the recipe in the box but the fully prepared, proportioned individual meals. I enjoy cooking but not thinking about what I have to eat is something that I find makes my day easier, especially now that I have a baby. It’s just fuel, i can eat the same thing everyday and be fine. Plus it helps me stay on the straight line nutrition wise.

There’s a good book on this topic called Happy Money I recommend.

7) Something that you changed your mind on? Our ego o en gets in the way of greatness.

2 Things:

1. I used to think of insurance for the financial aspects only but now I think about the riders, disability kickers, etc. Having a kid changes your thought process so now i’m more thoughtful about things like insurance, estate planning, etc. I’m still behind on that stuff, but now these long term planning things are in my thoughts.

2) Owning a house isn’t a big deal. We recently sold our house and moved to an apartment for a number of reasons…yada yada yada. I’m not full Grant Cardone though.

8) In this sellers market… what are you inves ng in? What should a someone who does not have a substan al level of cashflow yet be inves ng in?

My cash value life insurance/infinite banking strategy is my core foundation. I see that as the warchest and can let me sit on “cash” without losing too much. I’m obviously still actively pursuing multifamily, it’s harder of course with the current market, but deals can be found in all markets.

Nothing wrong with being patient if you think things are frothy. 100% of nothing is better than any percent of a bad deal. Being patient is the hardest thing.

brent@hellomultifamily.com

SPC110 – My Story – Evictions, Flip Project, Market Updates

YouTube Link: https://youtu.be/BXbgwbCcTnw

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word “ebook” to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math!

________Here are the Show Notes________

Dealing with an eviction:

“Hi Lane! I delivered an evection notice to tenants yesterday and had the opportunity to speak with husband at the door. He stated that he and his wife had both started new jobs and would be able to make one full payment in a week (this was the story for seemingly a month or two) and would be able to make a partial payment in 10 days. Before we proceeded forward with an agreement, wanted to see if that works for you. They are currently $3,000 behind before for a total of two months.  

Here is what I did…

I okayed the concession to give more time. I requested some sort of proof of new job status (a hire letter or email). I am more than willing to work with people… These have been long tenants of almost a couple years and B+ /A- home that rents for $1500 a month.

Caveat… I am really near to selling these properties this year and don’t really want to rock the boat in terms of enforcing long-term behavior.

Revamping my turnkey rental content – simplepassivecashflow.com/turnkey

I have currently sold 2 of 10 SFH rentals (P&L offer)

One of them Columbia is had $27K to get back online. Going to pay 37K to sell retail.

Another property Riverwood just went vacant. Going to pay 20-30K to sell retail too.

  • Talked with my team – PM, Contractor, couple other hui members
  • Is it a good area to go retail
  • Will I recoup capital overlay based on comps

Soon I will unrolling my private lending platform. CrowdfundAloha.com! So if you are looking for a 1st lien property with my partners let me know. We are talking about even providing turnkey services.

This is not really a money making things cause the margins are just really tough these days.

After over 1000 strategy calls with investors and coaching clients over the past couple years here is what I tell W2 employees… For those who are able to save more than $30k a year or have substantial liquidity (over 200k), being a landlord and especially flipping is a lot of work. If you like it cool/good for you… but just remember why we got into this… To be free from a JOB. A lot of us (80%) who stumble upon simplepassivecashflow.com and start drinking Kool-Aide will be financially free in 4-7 years pending taking action. So I always urge people to start with the end in mind and take a more passive approach.

Do the math here… you with 300 dollars per property (2 months of work to buy a turnkey rental) you are going to need 20-40 of these to replace your income. I have 10 of these and have systems in place but have 1-2 evictions a year and 3-4 big things that happen. Image if I had 30, just 3 x those numbers.

Directly investing in a turnkey rental or small MFH is a good way to start to learn and build up the war chest to go into my scaleable investments such as private placement syndications. Whatever you do, try to be as close to the investment as possible. This is the fundamental problem I have with Wall Street who takes too much fees off the hard-working efforts of the middle class.

Looking at some deals. So folks in the Hui Deal Pipeline Club (who have reached out to me and built a relationship) will see those really soon. 😛 I hope I have enough liquidity… I might need to borrow some money 😛

Single Family Homes becoming a legitimate asset class – Spring 2018 Conference

The lending requirements and new loan products is slowly changing. I know a lot of you have heard that Short Term Rentals (Air Bnb) income is starting to become part of the loan calculations.

Something I’m following is lending on large portfolios of single-family homes. Some of the highlights:

1) up to 10-year term with 1.25 DSCR

2) portfolios minimum size of 50 properties

3) assumable

Pilot program details download here – https://drive.google.com/open?id=1aTIbru2HEPbw_KLHTvU5-Iyk0aoQB8Gx

Look even a SFH conference – https://drive.google.com/open?id=1cI15DnBUn8LRA54NTCh667exeR3OtlIu

Other Fannie Changes – https://drive.google.com/open?id=1WumUWsduuLnHqDi6IJXNipX7IsT9AUFa

AirBnb lending requirements loosening

I read this following article that described rent concession in a few major cities that I like as apartment markets.

http://www.nreionline.com/multifamily/more-apartment-landlords-offer-free-rent-lure-tenants

Here is another article citing industrial as the sector to be in:

http://www.nreionline.com/industrial-cre-market-study/exclusive-research-clear-sailing-industrial-sector-through-2018

My takeaway is that this is important to monitor especially if you are developing because this is a leading indicator of softness in the market. It might be economic reasons or just because a bunch of new build inventory is coming online in that area. Either way…

Robert Kiyosaki has a saying, “there are three sides to a coin”.

People argue that its a good time to buy or bad time to buy. For example “mfh” is overheated or commercial is getting killed by Amazon and e-commerce. I think these are mental justifications by tire kickers not to do anything.

Sophisticated investors live on the edge of the “coin”. They buy deals out our reach of amateurs due to the lack for network/knowledge. These opportunities are undervalued, with undermarket rents, with value-add opportunity.

They are patient and don’t stray from standards that make them get crushed in a market correction. (Cashflow from other investments make this possible) They invest following the macro and micro trends and don’t gamble on gimmicks such as guessing where Amazon’s next HQ is going or where the hurricanes just crushed a market.

The trouble is as an outsider is figuring out which of these deals transcends the two side of coin and is on the edge. And starting out its going to be slim pickings due to lack of network but you have to push through this rough part.

I am from the camp that you need to become an expert or get beyond the surface level investor stuff in some freebie pdf guide or video. Or just find the right people to work with. To many people get shinny object syndrome and float from sector to sector, from a money-making activity to another, read book after book and never get anywhere. You see these people at a lot of networking events. There is a lot of movement but no tangible results. This is where coaching comes in but for some people not able to get over having another person call them out on their BS you need to get laser focused and take massive action or quit fooling yourself.

I’ll be at the notebuyerbootcamp on the panel for syndication in Chicago next week. Notebuyerbootcamp.com

Podcast #109 – Fundamentals – Comparing Crowdfunding websites with Andrew Savikas

YouTube Link: https://youtu.be/gaPmkHukwiM

Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

I’m doing some research on Crowdfunding sites (although I always prefer working directly with the operator as opposed to using these middlemen platforms). A lot of Hui Deal Pipeline Club members have been collaborating on this.

Have you used any of these platforms? Lets crowdsource deals and due diligence!

Here is a podcast I did with RealityShare – http://simplepassivecashflow.com/podcast-97-investing-via-crowdfunding-sites-open-country-club-chat-reality-shares/

As a syndicator I don’t like using these sites to raise funds because 1) I don’t have access to the investor contacts which totally kills the referral marketing for future deals and 2) we tried it on a previous deal where the Crowdfunding site committed to raising a small portion of our total raise and they fell on their face.. Not saying that the Crowdfunding sites will never be effective but at this time it is not a useful means for experienced syndicators who already have investors of their own.. So beware as an investor… its like trying to find a mate on Tinder (this is a controversial subject I know) but for many there is a reason they are on the “open market” and cannot attract “capital” on their own from their own personal network.. Just saying… 

Fundrise & Realty Mogul have launched “eREITs” which tries to tackle investment vehicles other platforms are not capitalizing on.. It’s interesting to watch how they trademarked “eREITs”.. Definitely a sign where investing is going.. Again institutions controlling and taking a cut away from the little guy.. 🙁

Blackhat tactic 😉 – Some deals are put out to private networks (like the Hui Deal Pipeline Club) and these crowdfunding sites simultaneously.. Many times the crowdfunding site offers a 7% preferred rate where the direct source offering gives a 8% preferred rate… tricky tricky if you ask me.. Now one could backwards engineer this all and go around the crowdfunding site but still like I always say YOU DON’T KNOW THESE GUYS.. Syndicator’s are running around out there without any operator experience or portfolio of their own and doing deals with people just off referral.. A recipe for disaster if you ask me..

Here are comments from Hui Members:

“I’ve invested in 10 you have listed and am familiar with quite a few others.  The best on your list are yieldstreet.comgroundfloor.us and streetshares.com. I have had 12-14 % returns with all three.  Hedgable.com is also a good site for investing in the stock market.”

“Some of the companies have questionable backgrounds make sure you google ‘company name + sec infraction;'”

“Just too much default rate”

“You are right! If you can find private placements skip these sites altogether”

“Sometimes you can use these CF sites to find the deals and google the operator. Often times if the CF site has it as a say 8% pref, going to direct to the operator will give a 9% pref”

“Groundfloor – I have not invested money in them but I have taken 2 loans on the borrower side and the experience has been mixed. They are fairly young start up and have many of the issues associated with that – high staff turn over and regular process change which has made the process a little frustrating. The sales person who managed the start of the process moved on half way through the loan being set up which resulted in the amount of the loan being incorrect, the structure of one loan was correct and the other wasn’t (interest paid monthly not accrued until the end) and the timelines were off. The good: the interest rates are low in the space so they offer good value (6.5%), the points paid are reasonable (I paid 2) and the loan is not income dependent but based on credit score and the LTV and project itself which was helpful for my borrowing criteria. You have to provide a monthly update on the project and they hold you to this and so I get the impression they do a good job of protecting investors money. Would I use them again? I’m not sure! It has been a pain but I also appreciate that they are committed to doing better. I now have a good private lender which is easier for me to use so would probably go that route and use groundfloor as a back up if needed.”

“Crowdfunding sites allow you to diversify amongst private offerings via the internet.  The website operates as a Broker-Dealer role and the supposedly “vet” the deal and sponsor.. Supposedly… yea whatever in my opinion.”

“Here is my issue. I always prefer working directly with the operator as opposed to using these middlemen platforms.. A lot of Hui Deal Pipeline Club members have been collaborating on this”

The returns started around 15% using my criteria but have leveled off to about 8% since then and I expect it to remain as this level.”

“Lending Club – This is UNSECURED debt. This is also known as peer to peer lending.. Like a guy needs to borrow 3k for a table saw for his business or someone has a broken car.. Good user experience and the information on the dashboard provided is much more readable than Prosper.com.. One user says “my net annualized return is 12.37 % and Adjusted net annualized return is 5.6%.. Both information is easily readable on the dashboard and it gives an easy to read view of the payments of how much principal, interest, late fees.. Also gives a good view of the notes itself like issued, in grace, fully paid, late by 16-30 days.  It has automatic re-invest and liquidate quickly.”

“PeerStreet – Works like Lending Club but is Secured by real estate.. They also give you quite a bit of information on borrower as well as the property details (LTV, Stressed LTV, Improved LTV, borrower’s FICO, etc).”.

“Prosper – It does same as above Lending Club but not as good dashboard information interface.. It has automatic reinvest.”

“Yieldstreet –  It’s for accredited investors only – So basically for people who are Rich already!”

“Some of the more established crowdfunding sites are starting to lower their returns because they have achieved a good sized crowd.. It’s still a wild wild west space with many platforms/website jockeying for position.. Many are offering high rates of return and under-collateralizing themselves in my opinion for market share.. Beware some have fraud in their past so make sure you do a little Google-stalking to dig up the dirt.. When I evaluate deals for the Hui Deal Pipeline Club, I realize there are so many deals out there that if someone has a questionable past, I just move on.. Too many good people doing good deals to not be choosy.. This is a newbie mistake I see a lot in private placement investors that they marry the first deal they get pitched at a local REI meeting.. It happened to my partner who lost $45K and myself who lost $40K.”

“Overall what I hear from you folks trying this method of investing is that the default rate is higher than what is expected and the middle man (crowdfunding site) is getting rich here.. But hey if you are not good at networking these are the table scraps you get.”

Here is the list I am working with:

 

https://alphaflow.com
AlphaFlow helps investors build diversified real estate portfolios across the crowdfunding industry. Make informed decisions, faster.

https://agfunder.com
AgFunder is the premier marketplace for the most promising Ag and AgTech startups seeking to raise investment capital from accredited investors.

https://1000angels.com
Build your own venture portfolio, free of management fees or carried interest.

https://angel.co
Private single-deal VC funds led by top angels.

https://yieldstreet.com
YieldStreet connects investors to originators with deep expertise in alternatve lending.

https://bolstr.com
Invest in businesses you understand and believe in.

https://circleup.com
CircleUp lists companies for you to review across a spectrum of consumer product and retail categories. Browse or search our portfolio to find opportunities that interest you.

https://crowdfunder.com
Venture Capital: Crowdsourced. Invest in many deals at the same terms as leading VCs

https://www.crowdstreet.com
CrowdStreet provides superior technology solutions that enable all investors to directly connect, invest, and create wealth through real estate.

https://equitymultiple.com
Gain exclusive access to high-yield commercial real estate deals

https://equitynet.com
Use EquityNet’s patented technology to efficiently screen and analyze thousands of investment opportunities in minutes.

https://equityzen.com
Where Private Investors Access Proven Startups

https://farmfundr.com
FarmFundr offers an affordable way to own and invest in high quality farmland.

https://flashfunders.com
Invest in Companies You Believe In

https://fundable.com
Fundable is a powerful fundraising platform that enables Startups to quickly engage a large network of Backers to raise capital.

https://fundersclub.com
Invest in the world’s most promising startups. Diversify your investment portfolio with insider access to highly vetted startups from Silicon Valley and beyond in just minutes.

https://fundingcircle.com
Invest in successful small businesses.

https://fundrise.com
Real estate meets technology, with one simple goal: Earn better returns.

https://www.fundthatflip.com
Earn 10+% annual yield by investing in qualified real estate loans.

https://www.groundfloor.us/
Private lending, now public. Earn average returns of 10%.

https://hedgeable.com
We are the only digital wealth manager to offer curated investing in venture capital.

https://homeunion.com
Build a diversified residential real estate portfolio using HomeUnion’s end-to-end services of property selection, acquisition, management and sale to match your financial goals

https://ifunding.com
Revolutionizing Real Estate Investing. Individuals invest as little as $5,000 in institutional quality real estate.

https://investability.com
Find Your Next Single-Family Investment Property Now

https://lendingclub.com
Build a diversified portfolio that can offers solid returns, low volatility, and monthly cash flow

https://lendingrobot.com
Automated management of your existing Lending Club, Prosper, or Funding Circle accounts.

https://lendinghome.com
Build your own diversified, institutional-quality real estate portfolio in minutes. LendingHome offers high returns and durations of just 12 months or less.

https://www.lexshares.com/
Earn returns by investing in lawsuits

https://localstake.com
Connecting businesses & local investors

https://www.macrocrowd.com
We work with investment specialists who have vetted billions of dollars in real estate developments. These industry giants provide us with exclusive investment opportunities for our platform’s investors.

https://microventures.com
Get access to highly curated early and late stage investment opportunities

https://nextseed.com
Invest in exclusive, pre-vetted deals that used to be available only to the wealthy and well-connected.

https://www.ourcrowd.com/
Invest alongside trusted venture capital and angel investors

https://patchofland.com
Earn up to 12% on your real estate investment in one year.

https://peerrealty.com
PeerRealty is the premier real estate crowdfunding platform. Gain insider access to high quality opportunities with top developers.

https://www.peerstreet.com
PeerStreet is a marketplace that provides unprecedented access to high quality real estate loan investments.

https://prosper.com
Investors can earn solid returns by investing in personal loans listed on Prosper

https://realtymogul.com
Commercial Real Estate Investing for All

https://realtyshares.com
Institutional quality real estate. Simplified investing

https://republic.co
Invest as little as $10 in the private companies shaping our future. Pick the companies you believe in and support their mission.

https://roofstock.com
Own an income producing house with as little as $20K down. No hassle.

https://seedinvest.com
Invest in highly vetted startups.

https://seedups.com
Connecting Investors with Technology Startups

https://selequity.com
Selequity connects accredited investors with the sponsors of commercial real estate (CRE) investment offerings. Our national network of accomplished real estate professionals assures you’ll have unique access to investment opportunities.

https://sharestates.com
Invest in real estate with as little as $1,000. Faster access to capital for real estate developers.

https://startengine.com
Invest in companies you believe in

https://trialfunder.com
We make access to the lucrative legal funding industry possible

https://upstart.com
We go beyond FICO scores to finance people based on signals of their potential, including schools attended, area of study, academic performance, and work history.

https://wefunder.com
Back founders solving the things you care about. Grok the risks, then join 93,004 investors who funded 155 startups with $35.5 million.

https://www.wundercapital.com
Invest in solar projects. Do well and do good.

https://crowdsourcefunded.com/
Where entrepreneurs and investors source the wisdom of the crowd.

https://dreamfunded.com
The New Way for Everyone to Invest in Real Estate

https://equitybender.com
We seek to help Software and IOT companies raise capital online and build shareholder value.

https://fundingwonder.com
Invest in loans that help small businesses grow

https://gridshare.com/
GridShare enables everyday people to invest in renewable energy projects and cleantech companies.

https://growthfountain.com
Invest in local businesses and entrepreneurs you believe in, starting at $100

https://indiecrowdfunder.com
Equity-based Entertainment Crowdfunding

https://jumpstartmicro.com
Jumpstart Micro brings together investors,

entrepreneurs and innovation in one place.

https://mrcrowd.com
Mr. Crowd is a SEC-registered equity crowdfunding platform

https://minnowcfunding.com
You Can Invest in Real Estate. Start Small, Dream Big

https://netcapital.com
An open market that brings together entrepreneurs and investors

https://smallchange.com
We Bring You Projects That Make Cities Better. You Invest In Them.

https://razitall.com
Razitall. An innovative equity crowdfunding platform. You pitch, you bid, and everyone wins.

https://us.trucrowd.com/
A new way to diversify your investment portfolio

https://diversyfund.com/
The simplest way to invest in real estate. Higher returns, lower fees and start with as low as $5000.

https://www.richuncles.com/
Invest Alongside Experts in Real Estate

https://acquirerealestate.com
Acquire Real Estate identifies, underwrites and pre-funds high quality commercial real estate properties. We then offer the opportunity for accredited investors to invest alongside us.

https://www.wealthmigrate.com/
Wealth Migrate is the leading global real estate investment marketplace, giving investors direct access to exclusive real estate investment opportunities in premier markets around the world.

https://neighborly.com/
Invest in the places you live, work and play. Neighborly is modern public finance.

https://www.iintoo.com/
Invest in Exit-Oriented Real Estate for as little as $ 25,000

https://www.1031crowdfunding.com
We are an online marketplace for 1031 Exchange investments.

https://healthfundr.com
Invest in healthcare’s transformation. Private investing at the intersection of financial returns and impact.

https://www.money360.com
Invest in loans secured by income-producing properties

https://www.propellr.com
A curated marketplace for alternative asset investments

https://www.instalend.com
Invest online in senior debt real estate opportunities and earn monthly distributions

https://www.realcrowd.com
Build relationships with commercial real estate companies and invest directly in their investment opportunities.

https://www.venture.co
Diversify how you invest with access to new private companies in exciting industries raising funding with offerings open to both accredited and every day investors.

https://streitwise.com
A new way to invest in real estate designed to be rewarding and accessible for everyone, stREITwise cuts out the middlemen and passes the savings on to you, the investor.

https://holdfolio.com
Invest in a portfolio of properties we already own.

https://www.royaltyexchange.com
Your online marketplace for buying and selling royalties

https://hotelinnvestor.com/
Hotel Investment Banking – One Innvestor at a Time

https://www.energyfunders.com
Direct Energy Investing Made Easy

https://www.iselectfund.com/
iSelect works with accredited investors to assemble a diversified portfolio of the Midwest’s most promising emerging growth companies through their own financial advisors.

https://www.realtyevest.com
RealtyeVest is an online marketplace that connects investors and sponsors (real estate owner-operators) tocrowdfund exclusive real estate investments.

https://www.equityroots.com/
Become an owner or lender in branded hotels for as little as $15,000 per share.

https://www.arborcrowd.com
ArborCrowd is an online commercial real estate company. By allowing people to co-invest with successful real estate deal-makers, ArborCrowd enables millions of investors to maximize their financial returns.

https://fundanna.com/
The funding portal for all Cannabis and Hemp enthusiasts.

https://www.cannafundr.com/
Join the largest network of cannabis investors and entrepreneurs in North America

https://startwise.com
Revenue sharing deals accessible to Everyone

https://cannacrowd.fund/
Legal Cannabis Investments

https://streetshares.com
Financial Solutions for America’s Heroes and Their Communities

https://crudefunders.com
Using Crudefunder’s innovative online investment marketplace, we provide sophisticated and beginner investors with the opportunity to invest in Oil & Gas Projects.

https://www.cityvest.com
CityVest is an online marketplace where accredited investors can pool their capital to buy shares in institutional real estate investments.

https://www.rabbleworks.com
Rabble is an impact investing platform that connects people with projects that strengthen communities.

https://firstrealfund.com
First RealFund’s Mission is to identify, offer, co-invest, & manage superior commercial real estate investments with capable owners and quality assets.

https://www.cuttingedgex.com/
The Direct Public Offering marketplace connecting investors with social enterprises.

https://www.honeycombcredit.com/
Honeycomb allows local businesses to borrow loans of up to $50,000 directly from their own loyal customers for business expansion projects.

https://www.milkmoneyvt.com
Online equity crowd-funding portal connecting Vermont’s “Main St.” investors with Vermont entrepreneurs.

https://wunderfund.co
Invest in Big Ideas Near You

https://fig.co
A publisher where you can get a share of revenue from game sales – we bring together developers and communities from all over the world to publish great games.

https://www.buytheblock.com
Buy The Block online investing in real estate with your peers. Pool funds, share knowledge, vote on a property to invest, efficiently manage accounts online.

Pardon the grammar – I’m an Engeneer, Enginere, Engenere… I’m good with math! Here are the Show Notes:

Investor, advisor, writer, father. Founder at @yieldtalk. Ex @oreillymedia, @safari. Occasional consultant & speaker. Chronic reader.

1) Your background and your Real Estate investing track record?
Andrew Savikas
andrew@yieldtalk.com
My own journey through crowdfunding, especially real estate
Related posts:
https://yieldtalk.com/my-crowdfunding-portfolio/
https://yieldtalk.com/baby-steps-getting-started-with-crowdfunded-real-estate/
https://yieldtalk.com/why-you-should-care-about-real-estate-as-an-investor-even-if-you-dont-care-about-real-estate-investing/
Importance of new crowdfunding choices in helping fuel entrepreneurism (and overall economic growth), especially serving traditionally underserved categories (eg non-males and non-tech companies outside of Silicon Valley, NYC, and Boston)
Related posts:
https://yieldtalk.com/crowdfunded-investing-democratizes-capitalism/
https://yieldtalk.com/can-crowdfunding-help-close-300b-funding-gender-gap/
Importance of understanding “convex” vs. “concave” risk, and the implications for risk/reward profile of your portfolio
Related posts:
https://yieldtalk.com/diversification-crowdfunding-investments/
https://yieldtalk.com/know-your-alternative-investing-style-zebra-or-lion/
The surprising number of choices out there for non-accredited investors
Related posts:
https://yieldtalk.com/24-ways-crowdfunding-for-non-accredited-investors/
https://yieldtalk.com/5-best-equity-crowdfunding-sites-beginning-investors/
You should also ask me about the time I had to pick between the Google IPO and a new couch (I picked wrong!)

criteria in your site, insights from looking at all though sites, and your recommendation for people to invest in rentals, crowd funding, or direct syndication.

2) Something that you have recently or thought about “burning your cash” on for time savings or an improvement in quality of life.
[Andrew] After leaving my last job (CEO of an ed-tech company for 5 years) right after my second child was born, deliberately moved to a lower-cost-of-living place and dialed down work commitments to have more time with my kids while they’re young. Definitely worth it! But I’ll never forget the night I was putting my son to sleep soon after my daughter was born and contemplating the return to a very demanding job that was only going to get more so, and imagining myself 5 years in the future wishing I could trade the money I’d made for more time with the kids while they were growing up.

3) Something that you changed your mind on? Our ego often gets in the way of greatness.
[Andrew] Having kids definitely changed my perspective about the opportunity cost of my career trajectory. Has helped me see the benefits of a more balanced portfolio approach compared with driving 1000% down one path.
Also, what it means to have a “balanced” or “diversified” portfolio. Was profoundly influenced by Nassim Taleb’s “Anti-fragile” and the concepts of convex and concave risk (and the notion of a “barbell” portfolio).

4) Anything we missed and contact info if you would like anyone to get a hold of you. URL?
[Andrew] I’m a voracious reader, and as a side project I started posting lengthy reviews of books that have shaped my thinking about leadership, strategy, business, and more. I’m also super into meditation and mindfulness, and have written about 10 books that helped me apply mindfulness to my life in general, and doing better work in particular.

And speaking of books, 13 years ago I wrote a book about Microsoft Word of all things.